Trez Company began operations this year. During this year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. Income Statement (Absorption Costing) Sales (80.000 units x $45 per unit) Cost of goods sold Gross profit Selling and administrative expenses Income Additional Information a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2.25 per unit in variable selling and administrative expenses. b. The company's product cost of $25 per unit consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($700,000/ 100,000 units) Required: Prepare an income statement for the company under variable costing. TREZ Company Income Statement (Variable Costing) Sales Less: Variable expenses Answer is not complete. Variable cost of goods sold Variable selling and administrative expenses Less: Fixed expenses Fixed overhead Fixed selling and administrative costs Loss $ 3,600,000 2,000,000 1,600,000 580,000 $ 1,020,000 3333 3 003 $ 4 per unit $ 11 per unit $ 3 per unit $ 7 per unit $400,000 X $ 3,800,000

Trez Company began operations this year. During this year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. Income Statement (Absorption Costing) Sales (80.000 units x $45 per unit) Cost of goods sold Gross profit Selling and administrative expenses Income Additional Information a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2.25 per unit in variable selling and administrative expenses. b. The company's product cost of $25 per unit consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($700,000/ 100,000 units) Required: Prepare an income statement for the company under variable costing. TREZ Company Income Statement (Variable Costing) Sales Less: Variable expenses Answer is not complete. Variable cost of goods sold Variable selling and administrative expenses Less: Fixed expenses Fixed overhead Fixed selling and administrative costs Loss $ 3,600,000 2,000,000 1,600,000 580,000 $ 1,020,000 3333 3 003 $ 4 per unit $ 11 per unit $ 3 per unit $ 7 per unit $400,000 X $ 3,800,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

s
Please do not give solution in image format thanku
Whitman Company Income Statement Sales (38,000 units $41.60 per unit) Cost of goods sold (38,000 units x $23 per unit) Gross margin Selling and administrative expenses $ 1,580,800 874,000 706,800 475,000 Net operating income $ 231,800 The company's selling and administrative expenses consist of $285,000 per year in fixed expenses and $5 per unit sold in variab expenses. The $23 unit product cost given above is computed as follows: Direct materials Direct labor Variable manufacturing overhead $ 11 4 4 Fixed manufacturing overhead ($216,000 + 54,000 units) Absorption costing unit product cost 4 $ 23 Required: 1. Redo the company's Income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating Income on your variable costing Income statement and the net operating Income on the absorption costing Income statement above. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Redo the company's…
Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced 1,000 kayaks and sold 750 at a price of $1,000 each. At year-end, the company reported the following income statement information using absorption costing. Sales (750 x $1,000) Cost of goods sold (750 x $425) Gross profit Selling and administrative expenses Income Additional Information $ 750,000 318,750 431,250 240,000 $ 191,250 a. Product cost per kayak under absorption costing totals $425, which consists of $325 in direct materials, direct labor, and variable overhead costs and $100 in fixed overhead cost. Fixed overhead of $100 per unit is based on $100,000 of fixed overhead per year divided by 1,000 kayaks produced. b. The $240,000 in selling and administrative expenses consists of $95,000 that is variable and $145,000 that is fixed. Prepare an income statement for the current year under variable costing. Income KENZI Income Statement (Variable Costing)
The following is the year ended data for Tiger Company: Sales Revenue $58,000 Cost of Goods Manufactured 21,000 Beginning Finished Goods Inventory 1,100 Ending Finished Goods Inventory 2,200 Selling Expenses 15,000 Administrative Expenses 3,900 What is the gross profit? A. $22,100 B. $38,100 C. $19,200 D.
Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement Sales (40,000 units x $44.60 per unit) Cost of goods sold (40,000 units x $22 per unit) Gross margin Selling and administrative expenses Net operating income $ 1,784,000 880,000 904,000 460,000 $ 444,000 The company's selling and administrative expenses consist of $300,000 per year in fixed expenses and $4 per unit sold in variable expenses. The $22 unit product cost given above is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($180,000 + 45,000 units) Absorption costing unit product cost Required: $ 10 5 3 4 $ 22 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption…
AJ Manufacturing Company Incurred $55,500 of fixed product cost and $44,400 of variable product cost during its first year of operation. Also during its first year, AJ incurred $17.650 of fixed and $14.100 of variable selling and administrative costs. The company sold all of the units it produced for $182.000. Required a. Prepare an income statement using the format required by generally accepted accounting Principles (GAAP) b. Prepare an income statement using the contribution margin approach. Complete this question by entering your answers in the tabs below. Required A Required B Prepare an income statement using the format required by generally accepted accounting Principles (GAAP). AJ MANUFACTURING COMPANY Income Statement
The level of inventory of a manufactured product has increased by 7,859 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $11.00 $8.00 Unit operating expenses of the period 4.00 2.00 The effect on operating income if variable costing is used rather than absorption costing would be a(n) Oa. $78,590 increase Ob. $62,872 increase Oc. $78,590 decrease Od. $62,872 decrease
Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement Sales (42,000 units x $43.60 per unit) Cost of goods sold (42,000 units x $23 per unit) Gross margin Selling and administrative expenses Net operating income $ 1,831, 200 966,000 865,200 483,000 $ 382,200 The company's selling and administrative expenses consist of $315,000 per year in fixed expenses and $4 per unit sold in variable expenses. The $23 unit product cost given above is computed as follows: Direct materials. Direct labor $ 10 4 Variable manufacturing overhead 3 Fixed manufacturing overhead ($276,000 46,000 units) 6 Absorption costing unit product cost $ 23 Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption…
Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Income Statements (Absorption Costing) Sales ($52 per unit) Cost of goods sold ($36 per unit) Year 2 Year 1 $ 1,508,000 1,044,000 $ 2,756,000 1,908,000 Gross profit Selling and administrative expenses Income Additional Information a. Sales and production data for these first two years follow. Units Units produced Units sold Year 1 41,000 29,000 Year 2 41,000 53,000 464,000 366,000 848,000 462,000 $ 98,000 $ 386,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $36 per unit product cost using absorption costing consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($451,000/41,000 units) Total product cost per unit $ 11 11 3 11 $ 36 c. Selling and administrative expenses consist of the following. Selling and Administrative Expenses Variable selling and administrative…
Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement Sales (39,000 units x $41.60 per unit) Cost of goods sold (39,000 units x $24 per unit) Gross margin Selling and administrative expenses Net operating income $ 1,622,400 936,000 686,400 448,500 $ 237,900 The company's selling and administrative expenses consist of $292,500 per year in fixed expenses and $4 per unit sold in variable expenses. The $24 unit product cost given above is computed as follows: Direct materials $ 11 Direct labor 5 Variable manufacturing overhead 3 Fixed manufacturing overhead ($260,000 + 52,000 units) Absorption costing unit product cost 5 $ 24 Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption…
AJ Manufacturing Company incurred $50,500 of fixed product cost and $40.400 of variable product cost during its first year of operation. Also during its first year, AJ incurred $16,150 of fixed and $13,100 of variable selling and administrative costs. The company sold all of the units it produced for $162,000. Required a. Prepare an income statement using the format required by generally accepted accounting Principles (GAAP). b. Prepare an income statement using the contribution margin approach. Complete this question by entering your answers in the tabs below. Required A Required B Prepare an income statement using the format required by generally accepted accounting Principles (GAAP). AJ MANUFACTURING COMPANY Income Statement Required B > Mc Graw Hill